Bill Details - HB645 (2017)

HB 645-FN - AS INTRODUCED

 

 

2017 SESSION

17-0647

10/04

 

HOUSE BILL 645-FN

 

AN ACT relative to retiree health care benefits for future retirees.

 

SPONSORS: Rep. Kurk, Hills. 2

 

COMMITTEE: Executive Departments and Administration

 

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ANALYSIS

 

This bill limits the provision of medical benefits to spouses of retired state employees.  The bill also removes the availability of retired state employee group medical benefits plan to persons who commence service on and after July 1, 2017.

 

This bill also requires the department of administrative services to develop, implement, and administer a retired state employee health benefits defined contribution plan.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

17-0647

10/04

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Seventeen

 

AN ACT relative to retiree health care benefits for future retirees.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  New Paragraph; Medical and Surgical Benefits; Retired State Employees; Definition of Spouse.  Amend RSA 21-I:30 by inserting after paragraph VII the following new paragraph:

VII-a.  For the purposes of this section, "spouse'' means (a) for state employees who retire on or after July 1, 2017, the spouse of the retired employee on the effective date of the retired employee's retirement from active service, and (b) for state employees who retired prior to July 1, 2017, the current spouse of the retired employee on July 1, 2017.

2  Medical and Surgical Benefits; Eligibility; Spouse.  Amend RSA 21-I:30, V(b) to read as follows:

(b)  [If an unmarried retiree marries after retirement, the benefit plan shall be extended to the new spouse.] Notwithstanding paragraph II, if a married retiree divorces after retirement, the divorced spouse shall no longer be eligible to participate in the benefit plan but shall be offered a federal COBRA benefit option.

3  New Paragraph; Medical and Surgical Benefits; Group I; Retired Employee Eligibility.  Amend RSA 21-I:30 by inserting after paragraph VI the following new paragraph:

VI-a.  Notwithstanding the eligibility provisions in this section for state employees, no state employee who commences service on or after July 1, 2017 shall be eligible to be a retired employee as defined in paragraph VI and shall not be eligible to participle in the group medical benefits plan available to group I  retired state employees who began service prior to July 1, 2017.

4  New Paragraph; Medical and Surgical Benefits; Group II; Retired Employee Eligibility.  Amend RSA 21-I:30 by inserting after paragraph VII the following new paragraph:

VII-a.  Notwithstanding the eligibility provisions in this section for state employees, no state employee who commences service on or after July 1, 2017 shall be eligible to be a retired employee as defined in paragraph VII and shall not be eligible to participle in the group medical benefits plan available to group II  retired state employees who began service prior to July 1, 2017.

5  Department of Administrative Services; Retired State Employee Defined Contribution Plan for Health Benefits.  The commissioner of the department of administrative services shall develop a defined contribution plan for health care to be implemented for non-Medicare-eligible state retirees and Medicare-eligible state retirees by January 1, 2018.  Appropriate legislation incorporating the plan and any related statutory changes shall be proposed for introduction prior to January 1, 2018.  The plan shall be constructed substantially as follows:

I.  A Medicare-eligible defined contribution plan.

(a)  The plan shall apply to retirees and spouses eligible for Medicare, and allow Medicare-eligible dependents to participate at full cost to the retiree.

(b)  On or after January 1, 2018, the current group plan for Medicare-eligible retirees and spouses and dependents will terminate and the commissioner of administrative services will administer the defined contribution plan for retiree health benefits for retirees, spouses, and dependents who are Medicare eligible.  

(c)  The Medicare-eligible retiree provisions shall include the department of administrative services paying a defined amount for a retiree and spouse into a health reimbursement arrangement (HRA) administered by a private Medicare exchange that will assist participants with enrollment in individual Medicare health benefit plans.

(d)  Minor dependents and disabled adult dependents who are eligible for Medicare may continue to participate at full cost to the retiree.

(e)  The commissioner of administrative services shall procure the services of a private Medicare exchange administrator.

(f)  The amount of the defined benefit shall be determined annually by the department and approval by the fiscal committee of the general court after a public hearing, within the funds appropriated by the legislature.

(g)  If enrollment is greater than projected, the fiscal committee of the general court shall authorize additional funding to provide retiree health benefits.

(h)  The reserve requirement in RSA 21-I:30-b would be removed for the Medicare-eligible defined contribution plan, since claims reserve is no longer necessary.

(i)  Prior to adoption, the proposed plan design of the Medicare-eligible state retiree defined contribution plan shall be approved by the fiscal committee of the general court after a public hearing.

II.  A non-Medicare-eligible state retiree defined contribution plan.

(a)  Funding approved in the state budget will determine monthly state paid benefit amount that will presumably increase over time.

(1)  On or after January 1, 2018, the department of administrative services shall pay a defined dollar amount monthly for retiree health benefits for all non-Medicare eligible retirees and spouses.

(2)  The amount of the state’s monthly defined dollar amount shall be determined annually by the department and approved by the fiscal committee of the general court after a public hearing, within the funds appropriated by the legislature.

(3)  All non-Medicare eligible retirees and spouses who participate in the plan shall pay the balance of the monthly working rate premium to the department or their benefits will terminate.

(4)  Minor dependents and disabled adult dependents who are not eligible for Medicare may continue to participate at full cost to the retiree.

(b).  The non-Medicare-eligible state retiree health plan would require retaining a revised version of the reserve requirement in RSA 21-I:30-b since the state retains the claims risk associated with running the non-Medicare-eligible plan.

III.  The provision of state retiree health plans and the funding of a defined construction health plan are subject to future appropriations and are not guaranteed.

6  Effective Date.

I.  Section 5 of this act shall take effect upon its passage.

II.  The remainder of this act shall take effect July 1, 2017.

 

LBAO

17-0647

1/24/17

 

HB 645-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to retiree health care benefits for future retirees.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2018

FY 2019

FY 2020

FY 2021

   Appropriation

$0

$0

$0

$0

   Revenue

Indeterminable

Indeterminable

Indeterminable

Indeterminable

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

Funding Source:

  [ X ] General            [ X ] Education            [ X ] Highway           [ X ] Other

 

The  Judicial Branch was originally contacted on January 6, 2017, with followup on January 18, 2017 for a fiscal note worksheet, which the Branch has not provided as of January 24, 2017.

 

METHODOLOGY:

The Office of Legislative Budget Assistant is unable to complete a fiscal note because the Office is awaiting information from the Judicial Branch.  When completed a revised fiscal note will be forwarded to the House Clerk's Office.

 

This bill limits the provision of medical benefits to spouses of retired state employees.  The bill also removes the availability of retired state employee group medical plan benefits to persons who commence service on and after July 1, 2017.  The Department of Administrative Services is required to develop, implement and administer a retired state employee health benefits defined contribution plan.

 

The Department of Administrative Services states that the bill limits spousal coverage to the State retiree’s spouse as of July 1, 2017 or at the time of retirement, which represents a future cost avoidance of spousal health coverage in the event of death or divorce of the retiree’s spouse at the time of retirement.  The fiscal impact of this provision is indeterminable.  There is no fiscal impact for new hires not being eligible for  retiree health benefits because all new hires as of July 1, 2017 and thereafter will not be eligible for retiree health benefits.  A defined contribution retiree health benefit as proposed in the bill changes how the State administers benefits.  The amount of the defined contribution will be calculated annually by the Department and approved by the Fiscal Committee within the funds appropriated by the Legislature.  Future budget appropriations are unknown, and therefore the fiscal impact of such a plan is indeterminable.

 

The New Hampshire Retirement System states there is no fiscal impact to the retirement system.

 

AGENCIES CONTACTED:

Department of Administrative Services, New Hampshire Retirement System, and Judicial Branch

 

Docket

Date Status
Jan. 5, 2017 Introduced 01/05/2017 and referred to Executive Departments and Administration HJ 3 P. 23
Feb. 1, 2017 Public Hearing: 02/01/2017 02:00 PM LOB 301-303
Feb. 8, 2017 Executive Session: 02/08/2017 10:30 AM LOB 306
Feb. 15, 2017 Committee Report: Inexpedient to Legislate for 02/15/2017 (Vote 17-1; CC) HC 11 P. 11
Feb. 15, 2017 Inexpedient to Legislate: MA VV 02/15/2017 HJ 7 P. 13

Action Dates

Date Body Type
Feb. 1, 2017 House Hearing
Feb. 8, 2017 House Exec Session
Feb. 15, 2017 House Floor Vote

Bill Text Revisions

HB645 Revision: 203 Date: Jan. 25, 2017, 11:24 a.m.